Cardano (ADA) has seen its spot trading volume on decentralized exchanges drop by more than 95% since early January — falling from a peak of around $1.49 million on January 6 to approximately $68,552 on January 22 — yet large holders have reacted by accumulating over 1 billion ADA, valued between $360 and $380 million at current prices.
What happened: spot volume collapses
The drop in volume tracked by Dune Analytics only reflects spot transactions, that is to say, actual purchases and sales rather than leveraged positions.
This distinction is important, as it suggests that retail participation has largely withdrawn from the market.
ADA lost its 20-day exponential moving average in mid-January. The token has already shown sensitivity to this indicator, with similar breakouts in October preceding a 55% drop, then in December leading to a 25% correction.
Addresses holding over 1 billion ADA began to accumulate around January 14. Their combined holdings increased from 1.92 billion ADA to 2.93 billion ADA during the correction.
A second group, wallets holding between 10 and 100 million ADA, added about 30 million tokens starting January 17.
Also read: Ethereum Reserves Hit 10-Year Low Across Exchanges As Price Falls Below $3K
Why this matters: potential for a short squeeze
The accumulation occurred after the trend break became evident. Both groups of whales bought into visible weakness rather than chasing momentum.
The positioning in derivatives has shifted significantly in the opposite direction.
Short positions now total $22.12 million in leverage on perpetual futures, with Binance showing an exposure to short liquidations about 2.5 times higher than that of longs. This imbalance creates conditions where modest purchases could force a rapid buyback of short positions.
Short liquidation pressure begins to strengthen around $0.37 and increases significantly above $0.39. The bearish scenario only takes control if ADA breaks and stays below $0.34.
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